Capespan sells its interest in Joy Wing Mau

Capespan Group Limited (“Capespan”), the South African based multinational marketer and distributor of fresh fruit, today announced the sale of its entire 9.23% shareholding in the Chinese fruit distributor Joy Wing Mau to a consortium of Chinese investors. The pre-tax purchase consideration for the shares is RMB 566 million which equates to R1.17 billion at the current exchange rate.

According to Capespan’s managing director, Tonie Fuchs, Capespan and Joy Wing Mau have shared a long and fruitful relationship. “Capespan has over the years invested in a number of companies internationally in order to expand our footprint in geographically and commercially strategic regions. All our investments are of a strategic commercial nature, underpinned by a material shareholding. These partnerships, especially our relationship with Joy Wing Mau, have been key to Capespan’s success”, he said.

In December 2015, Joy Wing Mau was formed from the merger between Golden Wing Mau (in which Capespan held 25%) and Joyvio. This merger created a much larger, vertically integrated business. In the process and through subsequent corporate actions during 2017, Capespan’s shareholding in the newly merged entity diluted to 9.23%. “Even though Capespan’s partnership and commercial relationship with Joy Wing Mau remains strong, the dilution in shareholding reduced the strategic influence that Capespan retained through this investment. Capespan is not an investment holding company. We invest where we need, through greater strategic influence, to expand our market penetration for the benefit of our grower supplier customers. We also realised that, since our investment in Golden Wing Mau eight years ago, our commercial partnership has outgrown our investment. Our commercial relationship has flourished because we know and trust each other, not because of Capespan’s shareholding. Joy Wing Mau remains Capespan’s commercial partner, despite the sale of our investment,” said Fuchs.

Fuchs further explained that Capespan and Joy Wing Mau also remain joint shareholders and partners in JWM Asia, the Hong Kong and Tokyo based fruit marketer and distributor with a sales footprint across Asia (outside China). He added that: “Asia is a fast growing region for the consumption of quality fresh produce from reputable product brands. Capespan remains fully committed to our customers and partners in this region.”

In recent years, Capespan has invested heavily in growing its farming operations in Southern Africa and in technology within the fruit marketing and distribution division. “Capespan is a producer and global marketer of fruit. That is our core business. We will use the bulk of the proceeds of this sale to strengthen our core business, with the aim to provide a more efficient and cost effective service to our grower and market customers,” said Fuchs.

According to Norman Celliers, CEO of Zeder Investments, the parent company of Capespan, the reinvestment of the bulk of the sale proceeds underlines Zeder’s commitment to Capespan. “The reinvestment will considerably reduce the gearing of Capespan’s core businesses. It will stimulate business growth and reposition Capespan to focus on its primary operations,” he said.

Mr Mau Wah Liu, Chairman of Joy wing Mau, said: “Capespan has been our strategic partner for the last eight years and has contributed considerably to the growth of Joy Wing Mau. I would like to thank the management team and shareholders of Capespan for their support and contribution to the development of Joy Wing Mau. We continue to see each other as strategic partners in the supply and development of the Cape and Outspan brands in China.”